Dividend Income

Dividend Harvest – August 2017

 

What’s a value investor doing, blogging about dividends! That’s a question I don’t really have the answer to, except that I know that I want the option to cease and re-enter work as and when I please well before the official retirement age of 67. Dividends after all, are a part of value – for some value investors, they’re the only part of the cashflow to investors that counts.

August was the first Dividend Income month since starting my portfolio in April.

I received income from one company (RKN:AU), by way of a dividend in-specie, i.e. paid shares of GetBusy Plc, which listed on the London Stock Exchange, Alternative Investments Market (AIM) in lieu of cash.

GetBusy is essentially Reckon’s Document Management Business, now de-merged. The result is my portfolio holds GetBusy shares. I would have preferred an option for cash and don’t believe this was a shareholder friendly decision by management, mainly because the GetBusy shares are very difficult to own for Australian investors; just take a look at your brokerage account to see if it offers access to the AIM of the London Stock Exchange. If I ever want to sell these shares, I’ll need to open an account with Interactive Brokers, or find a Full Services Broker in Oz (if you know of a common Australian online broker with access to the LSE AIM please let me know).

Dividend Income: $192.80.

Yield on Cost: 9.20%.

This is a nice yield for my ever first dividend! 🙂

The de-merger changes the value of the underlying business too, as a result RKN trades at a lower price than before the dividend reflecting the lost earnings/revenue. I’m yet to get a re-estimate of value I’m confident in, but I think the market has sold Reckon down hard. Management said the demerger should free up cashflow for the remaining entity and allow the Document Management Business to be more accurately valued by the market (I’m skeptical).

I like to have dividends paid in cash, so I can direct where and when the funds are put to use. That’s not the case for this month’s payout, so for now I’ll just tuck the GetBusy shares in my back-pocket and get on with life.

What was your August dividend harvest like?

22 thoughts on “Dividend Harvest – August 2017

  1. Nothing for me in August unfortunately but September and October have a few things coming up.
    I think buying some undervalued stocks as well as those with good dividend payments is a good mix – though I’m no expert 😉

    1. September/October should be plump months for sure. It seems a number of companies like to payout soon after reporting season. It’s like a mini Christmas!

      I totally agree the mix of value/yield is worthwhile. I’ve got my eye on a couple high yield stocks at the moment, just waiting for a more attractive price.

    1. Hey Bert, great to see you drop by.

      Future dividends I’m going to reinvest, at the moment I have my eye on one or two Australian banks that have robust earnings growth histories and very stable dividends, but they’re a little expensive at the moment. I’d hold them for the long term all else being equal, so I’m happy to wait. I’m looking to create a bit of a large cap back bone for my portfolio.

    1. Thanks for dropping by DD. The YOC is very healthy – I’d be delighted if all my dividends we at least this good.

    1. $2 from Target and yet now your monthly dividends are way past that. It’s encouraging to see what can be done. Thanks for stopping by IH, hope your September is a productive one!

  2. Congrats on your first dividend! I remember getting super excited the first time money just appeared in my account. That’s a hell of a first dividend too.

    1. Cheers MrSLM. It is pretty exciting. I’ll be stoked to have future dividends paid into my brokerage account, fresh cash is just what us investors love.

  3. Grats on the first dividend wealth. No matter how small or big, that first dividend is always tremendous. The cool part is that it’s not just a one time thing, but you’ll be getting paid over and over and over again.

  4. Wow, >9% dividend yield on a first dividend, that’s fantastic! It’s going to get addictive now 🙂 Australian banks, I remember when I was in Australia in 2009, the interest rates were quite high over there (unlike what they did with North America), is that still the case?

    1. Thanks GYM very happy with the first dividend yield. Circa 2009 it was heaven getting 9% on a bank deposit! They’re down around 3.1% max now, though a standard savings account might yield 1.5% p.a. Thanks for stopping by again!

    1. Gotta get on board. Plus it’s a ton of fun writing a dividend update. Feels like you’ve got a little gold mining business generating income. Hopefully I’m not too wedded to Reckon. Owned it in 2012/13 and would like to think my judgement isn’t clouded by that.

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